According to the British Chambers of Commerce (BCC) nearly one in five businesses above the VAT threshold still know little or nothing about the new requirements of Making Tax Digital (MTD).
A BCC survey of almost 1,000 firms from across the UK, found that while levels of awareness and preparation have increased since the previous year, 19 per cent of companies which will be required to sign up have never heard of Making Tax Digital or know it only by name.
The business group said its study also identified widespread dissatisfaction on the roll-out of Making Tax Digital, particularly from small businesses, with significant new administrative burdens and a lack of clear guidance from HMRC commonly reported.
Suren Thiru, the BCC’s head of economics, said: “The idea to modernise the UK’s tax system is a good one, but the timing couldn’t be much worse.
“In the current environment, the introduction of Making Tax Digital is an added cost and administrative burden and there still isn’t adequate understanding or preparation among businesses to make its rollout a success right now.
“The political process of Brexit has stretched out the level of uncertainty as far as possible, leaving businesses in the dark until the eleventh hour and asking firms to prepare for all possible scenarios.”
Over a third (38 per cent) of businesses have had to upgrade or source new accounting software to prepare for the introduction of Making Tax Digital.
The BCC said businesses are also reporting that they are facing significant costs to upgrade, which it dubbed ‘unacceptable’ at a time when firms are facing a myriad of upfront and Brexit-related costs.
The BCC says next week’s Spring Statement would be the perfect opportunity for government to acknowledge that both its agencies and business communities need more time to plan sufficiently for these major changes, and announce a postponement.